OCZ Signs $25 Million Loan Agreement

OCZ Technology Group, Inc. has signed an agreement with Silicon Valley Bank (SVB) for asset-based financing of up to $25 million. This new agreement, which is set to expire in February 2012, expands the $17.5 million debt capability available under the prior joint factoring arrangements with SVB and Faunus Group International, Inc.

"We are pleased to extend our relationship with Silicon Valley Bank as this $25 million credit line provides increased financing capability at much lower interest rates than our previous factoring arrangements," said Arthur Knapp, OCZ’s chief financial officer. "This SVB facility combined with our $22 million equity funding in November 2010 helps finance the working capital required for the increasing demand of our solid state drive product lines, particularly those designed specifically for enterprise applications."

The new agreement contains financial covenants for quarterly EBITDA as defined in the agreement and a monthly quick-ratio computation. Interest rates range between prime +1.5% to prime +2.5%. There are also provisions for letter of credit sub-limits and various operational, reporting, negative and affirmative covenants with which OCZ must comply.